Business Rule

A business rule is a specific, actionable, testable directive that supports a business policy. Business rules can apply to people, processes, corporate behavior, and computing systems in an organization and are put in place to help the organization achieve its goals.  

Business rules define and provide a certain level of structure or behavior that is to be adhered to and aims to control or influence the operational business.

A standard method of managing business rules is through a business rule management system (BRMS), a software system used to define, deploy, execute, monitor, and maintain the variety and complexity of decision logic used by operational systems within an organization.  

A well-managed set of business rules allows for high customization and flexibility within the operational processes, leading to increased efficiency and consistency in decision-making processes.

Key Business Rule Aspects

It is helpful to be aware of the following business rule aspects:

1. Business Logic: Business rules often express an organization’s business logic. This logic defines how the organization operates in terms of policies, procedures, and operations.
2. Automation: In IT, business rules can often be automated and built into business systems. This could range from simple data validations (e.g., the ‘Date of Birth’ field cannot be a future date) to more complex processing rules (e.g., if a customer orders more than 100 units, apply a 10% discount).
3. Testability: A well-defined business rule can be tested and verified. This is critical when the rules are used in software applications to ensure that the system behavior aligns with the desired business policies.
4. Agility: Business rules allow for separating the business logic from the rest of the system’s code. This allows the rules to be changed without needing significant system redesign, thereby making the business more agile.
5. Compliance: Business rules are often used to ensure compliance with regulations and standards. By defining and enforcing these rules, organizations can help ensure they meet the necessary legal and regulatory requirements.
6. Communication: Business rules help facilitate better communication between stakeholders (such as business users, analysts, and developers) as they clearly and concisely define business processes and requirements.

Business Rules and Compliance

As mentioned earlier, business rules are critical in ensuring compliance with regulatory requirements. This is especially important in highly regulated industries such as finance, healthcare, and pharmaceuticals, where non-compliance with regulations can result in substantial penalties. 

Business rules can automate the compliance process, reducing the risk of human error and making it easier to demonstrate compliance to regulatory authorities.

The Future of Business Rules

As technology continues to evolve, the use of business rules is likely to become more sophisticated.

The growth of technologies such as cloud computing, big data, and the Internet of Things (IoT) will provide new opportunities for formulating and enforcing business rules. For example, IoT devices can generate a wealth of real-time data that can be used to inform decision-making.

At the same time, cloud computing can provide the computational resources needed to process this data and enforce the resulting rules.

With the evolution of AI, the decision-making processes based on these rules will also become more sophisticated, allowing for more complex and nuanced decisions. 

Business Requirements vs Business Rules – 9 mins